Plan to save Malheur Lumber Co. sawmill stems from unusual alliance

Jamie Francis/The OregonianThe Malheur Lumber Co. mill will stay open past its planned November closure now that the U.S. Forest Service will make more timber available for processing.

JOHN DAY -- A new plan to keep an imperiled sawmill running and save up to 70 rural jobs emerged from work by Oregon's congressional delegation, Gov. John Kitzhaber and an improbable collection of veteran tree huggers, timber industry woods bosses, local leaders and the U.S. Forest Service.

"Had you told me 10 years ago that I would be trying to keep a mill open in eastern Oregon, I would have said you're crazy, but things change," said Susan Jane Brown, Portland-based staff attorney for the Western Environmental Law Center.

Timber industry

The situation in Grant County is a reminder of how far Oregon's once-booming timber industry has fallen.

Mills: Of 405 sawmills employing 45,778 Oregon workers in 1980, the state tallied only 106 mills and 15,708 workers by 2010, said Tom Partin of the American Forest Resources Council, a timber industry advocacy group.

Harvests: Since 1980, national forest timber harvests in Oregon have dropped from more than 3 billion board feet a year to about 500 million board feet a year now. On the Malheur National Forest over the same period, harvests declined from 228 million board feet to 29 million board feet, said Forest Service spokesman Tom Knappenberger.

The math: 1 million board feet equals 50 homes.

The Malheur Lumber Co. sawmill, the last one still operating in Grant County, will remain open past its planned November shutdown after the Forest Service promised to speed up timber sales and take other steps to increase forest restoration projects.

The unlikely collaboration grew out of a growing sense that healing eastern Oregon's overgrown forests can't be done without sawmills, loggers and truck drivers to cut, remove and process logs.

Traditional foes who have fought bitterly in the past over forest management now widely agree that eastern Oregon's unhealthy forests have become overstocked, bug-infested fuel factories for catastrophic wildfires. The status quo stems from harvest reductions designed to halt clearcutting and restore habitat and wildlife, including the northern spotted owl. Canopy closures now blot out sunlight across much of the region, reducing forage for deer, elk and ranchers' cattle.

"We are pragmatists when it comes to restoration," said Sean Stevens, executive director of the environmental group, Oregon Wild. Loss of the 29-year-old Malheur Lumber Co. mill would be "a sad turn of events," he said.

Grant County has even offered the federal government what may be an unprecedented deal in hopes of keeping the mill open: a proposal to loan money budgeted for county roads to the cash-strapped Forest Service to finance more restoration, thus making logs available for the mill. The Forest Service doesn't know if that's feasible.

County landowners, at the same time, are offering to sell more private timber to the mill -- trees previously withheld from timber sales because the economic winds have blown prices into a deep hole.

An ongoing shortage of timber from 1.7 million-acre Malheur National Forest continues to plague the mill. The local Forest Service budget has been too small to undertake forest restoration, cutting its supply.

The mill ran out of timber for two months in spring 2011, and almost half the timber it processed last year was trucked in from Idaho, said Bruce Daucsavage of Prineville, president of the mill's corporate parent, the Ochoco Lumber Co.

"I can sell all the pine we can possibly produce, assuming it's the right size," Daucsavage said. The mill needs 33 million board feet of pine greater than 8 inches in diameter per year to keep operating, he said.

The new plan would direct $5 million in federal money to the Malheur forest immediately for forest restoration, including thinning and logging, brush mowing and the reintroduction of prescribed fires. The goal is to make about 60 million board feet of timber available for fiscal 2013 and 2014 on the Malheur.

While some of that timber would be too small for the mill and much would be Douglas fir and grand fir rather than pine, that amount of cutting probably would keep the John Day sawmill operating and might even provide enough timber to reopen a Prairie Wood Products stud mill in nearby Prairie City that closed four years ago, said Grant County Commissioner Boyd Britton.

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"That would be the best of all worlds," Britton said Thursday. "If this is successful on the Malheur National Forest, it might be a successful model for the rest of the nation.:"

The intervention follows work by Blue Mountains Forest Partners -- an industry-conservation-government group that formed in 2006 partly to undo damage caused by earlier mismanagement of the Malheur forest.

"We spent a bunch of money in the 1980s building roads and harvesting very large, very valuable old-growth trees," Brown said, referring to earlier Forest Service policies. "Now we are faced with dealing with the leftovers, a fire-prone forest and the need to do necessary restoration work."

Creating the partnership involved "a lot of time out in the field, looking at trees and talking about our feelings, which isn't easy for a lot of people," she said. A surprising level of trust was developed, she said.

Proof: "Over the past six years, we have had no lawsuits over forest-related management," said Teresa Raaf, Malheur National Forest supervisor.

View full sizeRichard Cockle/The OregonianJohn Day welder Boyd Britton, a Grant County commissioner, has been an outspoken advocate of saving his countyâs last sawmill by loaning reserve county road fund dollars to the U.S. Forest Service for forest restoration and the production of timber for the mill. Making that legal might take action by the Oregon Legislature, a Forest Service official said.

The Forest Service's mission no longer is to "get out the cut" as it was in the '80s, Raaf said. The focus now is to make it fire- and disease-resistant, with timber stands that are no longer overstocked with smaller trees, she said.

All agree a mill shutdown would hit Grant County's 7,445 residents like a brick through a log truck window.

Already struggling under 13.4 percent unemployment this summer, the county's population hubs at John Day and Canyon City are 80 miles from the nearest freeway, unusually remote even for eastern Oregon. Grant County is second in Oregon only to Crook County, which had a 14.1percent unemployment rate in July. The state's unemployment was 8.7 percent; and the nation's was 8.3 percent.

The graduating class of Grant-Union Junior-Senior High School in John Day last spring was 37, down from 74 in 2010. Grant County's overall population fell 6.2 percent over the past decade.

The loss of 70 sawmill jobs would be only the beginning of economic devastation for the area, said Thaddeus Thompson, operations manager for Chester's Thriftway in John Day, the county's biggest food store. He was braced for a 10 percent drop in food sales as residents left.

Other retail outlets, including tire and hardware stores, expected to be equally hard-hit. Grant County Sheriff Glenn Palmer predicted an upsurge in poaching, illegal marijuana growing and firewood cutting on the national forest.

"People are trying to make ends meet," he said. "We're already seeing people coming into town without firewood permits on their wood."

Russ Hoeflich, Oregon director for The Nature Conservancy, credited U.S. Sen. Ron Wyden for bringing the parties together to rescue the mill, including the governor, U.S. Sen. Jeff Merkley, U.S. Rep. Greg Walden, Forest Service's leaders, the Blue Mountain Partners and Grant County commissioners.

"He found a solution that can meet the needs of Malheur Lumber, the John Day community, and in the process significantly advances the conservation needs of the Malheur National Forest," Hoeflich said.